Dunkin’ Donuts sees $19 IPO

Dunkin’ Donuts made its highly anticipated debut on the NASDAQ on Tuesday with investors quickly pushing shares well above the $19 IPO price. Late Tuesday, bankers priced the company’s IPO at $19 per share, above the $16-18 price originally anticipated, raising $427.5 million which the company plans to use to pay down debt, including $500 million used to pay current private equity investors a special dividend late last year. Post-IPO the company will carry $1.5 billion in debt, which may be of concern to some investors as interest payments wiped out 75% of the company’s operating earnings last quarter.

Currently, Dunkin’ sells more hot regular coffee and iced coffee than anyone else in the U.S., including Starbucks (SBUX) and McDonalds (MCD). It holds 57% of the coffee market in New England and New York and coffee represents 60% of the company’s total revenue. Outside of its dominant position in the north eastern U.S., Dunkin’ is present in 30 other countries and is looking to open another 250 U.S. stores in the next two years. In its prospectus, the company said it “has the potential, over approximately the next 20 years, to more than double our current U.S. footprint and reach a total of 15,000 points of distribution in the U.S.” Currently, there are 18 Dunkin’ Donuts locations in Canada, 17 of which are in Quebec while one is located in Ontario.